DSM divests HVP business to focus on yeast extracts

DSM, the largest fermentation company in the world, sheds its HVP
business to industry conglomerate Oterap Holding in a bid to focus
on core activities, writes Lindsey Partos.

The hydrolysed vegetable protein (HVP) operations represent less
than 10 per cent of business at DSM Food Specialities, that overall
pulled in sales of €762 million last year.

In the Dutch firm's portfolio for over 10 years, "HVP have
always been an odd item in our product range because they are not
based on our core technology,"​ a spokesperson for DSM Food
Specialities tells FoodNavigator.com​today.

Shrugging off the HVP activities, based at Zaandam, north of
Amsterdam, will bring room to focus on the yeast extract
business.

The market for yeast extract based flavour enhancers has been
growing in parallel to the waning popularity of HVPs.

Food makers are increasingly moving away from including HVPs in
their formulations and towards yeast extract flavour enhancers,
driven by concerns that acid-hydrolysed HVP, produced using
hydrochloric acid, could be potentially carcinogenic due to the
3-MCPD levels.

Reporting on 2004 figures last month, DSM said sales at its food
speciality unit - that sells dairy, savoury, beverage and
nutritional ingredients - had risen by about 10 per cent.

Among the highlights were stronger volume sales of special yeast
extracts.

Overall, food ingredients at DSM brought about 17 per cent of
sales to the group's €7.75 billion turnover that includes pharma
and antibiotic products, a rise of five cent per cent on the 12 per
cent contribution in 2003.

Terms of the divestment were not disclosed but Oterap announced
intentions to market the newly acquired HVP activities under the
Exter brand.